Birmingham – a new investment hotspot

In recent years the UK’s second largest city of Birmingham has begun to draw attention from overseas investors.

Here we outline some of the key reasons why this once overlooked city has recently shot to prominence.

Affordability

Birmingham hasn’t yet returned to its peak pricing of 2007 while most of London and the flourishing South of England has already long surpassed pre-GFC levels. Land prices are reasonable meaning end cost to owner occupiers and investors are more attractive. The cost for major corporations to locate here is also significantly lower with savings of 55/60% on office rents in comparison to London.

Education

Boasting 5 universities and over 75,000 students Birmingham has a reputation as leading centre for education in the UK and is home to a pool of highly-skilled graduates who can complement the existing workforce as the city grows.

Location

Birmingham is advantageously positioned in the centre of the UK in relatively close proximity to London while also having other key regional centres like Manchester, Liverpool and Leeds within easy reach. Currently transport times from Birmingham to London can be as little as 1 hour 13 minutes by rail.

Birmingham is famous for its canals

Infrastructure Investment

Birmingham New Street Station has recently undergone a ￡550m renovation, re-opening in September 2015 the station is now the busiest interchange outside of London. Birmingham also features a metro system for movement around the city that has been recently updated and is part of an ongoing expansion plan. Perhaps most significantly Birmingham is the first stop on the new “HS2” rail system that will link London to Birmingham in 49 minutes.

Supply v Demand

Post GFC levels of build have been low with a new wave of housing creation only beginning recently at a time when the city is growing rapidly and also features the highest level of returnees from London in the UK. Forecasts show demand circa 4,000 new homes per year while supply is currently averaging circa 2.000 new homes per year.

Entertainment and Culture

Birmingham is an attractive city built largely in the Industrial Revolution with an old-school charm and famously claims to boast “more waterways than Venice”! It’s also home to more Michelin stars than any other UK city outside London and has a thriving nightlife scene. The Bullring shopping arcade in the City Centre is state of the art and features Selfridges for world class shopping and (whilst being a little down on their luck right now) two major football clubs also call the city home.

So, what does this mean for Birmingham?

Firstly these combination of factors have led to a number of prominent relocations from major institutionsHSBC: Moved its ring-fenced bank serving its personal and business customers from London to Birmingham, relocating some 1,000 roles.Deutsche Bank: Relocated 1,500 frontline and support employees from London to Birmingham.PricewaterhouseCoopers: Accommodated its staff at a new office tower in Birmingham, a testament to its confidence in the city's development.

A 2016 report by Savills found that over the past 10 years the average office occupancy rates in Birmingham, Manchester, Cardiff, and Edinburgh increased respectively by 105%, 39% 41%, and 44%.

Birmingham has now been voted as the #1 location in the UK for investment for two years running in their annual report “Emerging Trends in Real Estate”.

In conclusion

With strategic positioning, excellent connectivity, significant investment and the backing of some major Global corporations Birmingham is most definitely a city on the up. When these factors are coupled with relative affordability, an attractive migration story of a talented workforce and a lack of suitable housing it’s clear to see why Birmingham is gathering traction as a destination for property investment.